India “Reboot,” Reforms Still Met By Skepticism; Gandhi May Back Reforms

By Reshma Kapadia

Corporate executives, government officials and academics are meeting in India at the World Economic Forum India meeting and last night’s opening events and their comments offer a window into the challenges facing the country.

While Ashwani Kumar, Minister of Law and Justice, said the government was taking “corrective measures” and admitted a “reboot” was necessary, others voiced skepticism about the reforms. Gita Gopinath, a Harvard Economics professor, said there was little consensus on economic reforms and said that often reforms have been introduced with hopes of averting a credit downgrade and not because there is a recognition of the good such measures would bring.

(L-R) Indian Prime Minister Manmohan Singh, Congress party president Sonia Gandhi and Congress party general secretary Rahul Gandhi, adorned with garlands by party workers during a public rally, in New Delhi, India.

Earlier this week, Harvard’s Kenneth Rogoff was perhaps a bit more optimistic about the changes underfoot, noting the involvement of “superstar academic researcher” Raghuram Rajan. He also, however, recognizes the challenges in India’s unruly democracy, noting that the country may benefit from moving toward Europe’s decentralization –especially if recent reform efforts are blocked.

As for the market, the WisdomTree India Earnings Fund (EPI) is down 0.65% at $18.35.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. Barrons.com’s Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.